CBN imposes fresh limits on cash transactions

N150,000 for individuals; N1m for corporate firms

By Babajide Komolafe
LAGOS — FROM June 2012, individuals that make cash withdrawal or deposit above N150,000 would pay a fine of N100 per extra N1,000, while corporate organisations that make cash withdrawal or deposit above N1 million would pay fine of N200 per extra N1,000.

These limits for free cash withdrawal and deposits were part of a new policy aimed at reducing the high usage of cash in the economy announced by the
Central Bank of Nigeria, CBN, yesterday.

The policy, which would be enforced in Lagos State, Abuja, Port Harcourt, Kano and Aba in the first instance also banned encashment of third party cheques above N150,000 across the counter.

The policy was contained in a circular signed by the Director, Currency Operations Department, Mr. Muhammad Nda, and addressed to all banks, Cash In Transit (CIT) companies and electronic payment providers.

The circular entitled: "Industry policy on retail cash collection and lodgement" stated: “In view of increasing dominance of cash in the economy with its implication for cost of cash management to the banking industry, security, money laundering, etc., the Central Bank of Nigeria, in collaboration with the Bankers Committee, is adopting policies to reduce the high usage of cash, moderate the cost of cash management and encourage the use of electronic payment channels. Consequently, the Central Bank of Nigeria hereby directs as follows:

The limits

“Commencing from June 1, 2012, a daily cumulative limit of N150,000 and N1,000,000 on free cash withdrawals and lodgments by individual and corporate customers respectively with Deposit Money Banks (DMBs) shall be imposed.

To this end, individuals and corporate organisations that make cash transactions above the limits will be charged a penal fee of N100/thousand and N200/thousand respectively for amounts above the cumulative limits.

"Contravention of this policy shall attract a fine of five times the amount that the bank waives as a first offender. Subsequently, the bank shall pay ten times the charges waived.

“Furthermore, third party cheques above N150,000 shall not be eligible for encashment over the counter. Value for such cheques shall be received through the clearing house.

"If a bank allows third party cheque encashment, it shall be liable to a sanction of 10 per cent of the face value of the cheque or N100,000 whichever is higher.

“Banks will cease cash in transit lodgment services rendered to merchant-customers from June 1, 2012. In this regard, customers could engage the services of the CBN licensed cash-in-transit (CIT) companies to aid cash movement to and from their banks at mutually agreed terms and conditions. Contravention of this policy shall attract a fine of N1.0 million per specie movement.

“This arrangement shall be in force in Lagos State, FCT, Port Harcourt, Kano and Aba in the first instance. The arrangement shall be extended to other parts of the country at a date to be determined by the Bankers Committee."

“To achieve inter-operability of local currency POS transactions, no card scheme, foreign or local, shall operate exclusive acquirer agreement or contract in Nigeria with effect from June 1, 2011. Any payments scheme, processor, switching company, service provider or bank that contravenes this policy may be suspended for a minimum of one month by the CBN as a processor, switching company, service provider etc in the first instance.
The license may be withdrawn by the CBN if the contravention is repeated.

Application of policy

“This policy shall apply to both private and public sector transactions. All financial institutions including Deposit Money Banks, Savings and Loans, Mortgage and Microfinance Banks shall comply accordingly.

“Compliance with the policy shall be monitored by the Banking Supervision Department and the Other Financial Institutions Supervision Department with appropriate sanction applied to erring institutions.

“While the Central Bank of Nigeria will make general announcements and carry out public awareness programmes individual banks are expected to do same.

The affected customers of banks should be informed in good time by the banks
with clear advice on alternative electronic payment channels available to them.”

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Comment by naugh akaba on May 3, 2011 at 6:19pm
is it transactions made in a day or monthly? Well whatever it is i dont think its a good move.
Comment by Kane ga on April 29, 2011 at 1:43pm
Dont mind sanusi on that policy. Its a downfall for Nigeria bcos we are not yet ripe for such. We need cash 24/7 And by the way, how much is 150,000 in dollar? Very small something. Not even enough for AY SHOW! If he make the limit up to 2m it may be concidrable. He should also remove limits for deposit to encourage banking. Anyway, we are 9ja 4 life. He cant stop us. Ask paypal company and others. How many banks do we have in 9ja? More than 24 banks, right? See how we can cheat sanusi. It will take less than 48 hrs to open account with them. And within 8 hrs to withdraw more than 2m. That's N150,000 in each of the banks. Is it not ur money? Sorry 4 the stress sha. But sanusi should realize that this is not the time for such policy cos the poor will die. We need cash more than water. I know he will change his mind. This is a joke. Sure! Remember when GEJ ban eagles during world cup, did he not change his mind later? If N0. 1 man with 22.5m votes (free and fair) could change his mind, who is sanusi. My follow countrymen, stop wasting ur finger over this. Let talk other current issues on how to move Nigeria forward and peace especially in North.
Comment by Kane ga on April 29, 2011 at 1:43pm
Dont mind sanusi on that policy. Its a downfall for Nigeria bcos we are not yet ripe for such. We need cash 24/7 And by the way, how much is 150,000 in dollar? Very small something. Not even enough for AY SHOW! If he make the limit up to 2m it may be concidrable. He should also remove limits for deposit to encourage banking. Anyway, we are 9ja 4 life. He cant stop us. Ask paypal company and others. How many banks do we have in 9ja? More than 24 banks, right? See how we can cheat sanusi. It will take less than 48 hrs to open account with them. And within 8 hrs to withdraw more than 2m. That's N150,000 in each of the banks. Is it not ur money? Sorry 4 the stress sha. But sanusi should realize that this is not the time for such policy cos the poor will die. We need cash more than water. I know he will change his mind. This is a joke. Sure! Remember when GEJ ban eagles during world cup, did he not change his mind later? If N0. 1 man with 22.5m votes (free and fair) could change his mind, who is sanusi. My follow countrymen, stop wasting ur finger over this. Let talk other current issues on how to move Nigeria forward and peace especially in North.

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